(Exclusive Interview) How Can Digital Signatures Prevent Fraud in Online Transactions?

Ephemeral digital signatures are becoming increasingly essential in safeguarding online transactions against fraudulent activities.

In today’s digital era, where multitudes of products and services are available for purchase on the internet, the risk of fraudulent activities has also surged.

However, digital signatures provide a robust solution to mitigate this risk, offering a secure and reliable method for verifying the authenticity of electronic documents and transactions.

Ayesha Rashid explores the intricacies of digital signatures and how they play a crucial role in preventing fraud in online transactions, ultimately ensuring the security and trustworthiness of all parties involved with Shamsh Hadi, Co-Founder and CEO at ZorroSign.

Can you elaborate on how ZorroSign’s digital signature technology has evolved since its introduction in the ’90s, and how it has been adapted to address the ever-changing needs of government agencies and corporations?

Ten years ago, no one talked about blockchain for government agencies and very few corporations considered the technology for future applications. While blockchain was conceptualised in the early 1990’s, it was not until Bitcoin was created in 2008 that distributed ledger technology was considered viable for peer-to-peer networks.

Since Bitcoin’s arrival, however, the non-cryptocurrency applications of blockchain—for immutable and transparent data storage, facilitating zero-trust transactions over the Internet, and securing records in a decentralized dataset—have grown, slowly at first, and more rapidly over the past few years.

For government agencies, for example, ZorroSign started supporting real estate title transactions with our blockchain-based platform in 2015. That early application, ensuring the digital security and immutability of real estate ownership records, was critical to winning over other government applications such as urban planning processes (approving drawings and schematics for public works), further title deeds and real estate purchase agreements, then procurement across non-real estate transactions. Blockchain’s transparency and immutable records make it the ideal technology as a single-source of trust for chain-of-custody processes, public or private sector.

The concept of providing a solution for “end-to-end flow of document signature ceremonies for any situation, any industry, any department” is ambitious. What are some of the key challenges ZorroSign has faced in achieving this goal, and how have you addressed them?

As deploying blockchain-based solutions is still so new to most organizations, we have found that taking a “bottom up” approach of proving our technology with specific processes is far more effective that trying to win a “top down” approach where senior management selects ZorroSign to fulfill all digital signature and document management needs.

For example, if an HR workflow is the problem—heavily manual process, complex approval workflow, multiple recipients to engage and execute agreements, etc.—ZorroSign will start by digitising that process for just that HR workflow.

Our data security platform integrates workflow approvals and version management, then managing communications for digital signatures and executing agreements, and then storing and tracking signed documents for ready reference, regulatory compliance, and legal enforceability.

By proving our solution with tactical, real-world processes, we gain credibility at organizations hesitant to deploy web3 technologies like blockchain and AI and earn their trust. ZorroSign so effectively digitizes important processes (delivering superior privacy, security, and data management) that we gain champions at the department-level, who then help us move up-the-stack into other departments and across our client organizations.

Can you explain in more detail how the advanced integration between ZorroSign and Provenance Blockchain enhances data security and privacy for users, particularly in industries such as healthcare, finance, and government?

Provenance Blockchain is a public, open source blockchain used by more than 70 financial institutions, banks, credit unions, fintechs, and DeFi brands to actively manage and transact real-world assets across capital markets, lending, and payments. Provenance has become one of the world’s largest blockchain networks with over $8 billion of financial assets under administration and $15 billion in supported transactions.

Our recent integration with Provenance now allows ZorroSign users to store digital document information—including signers, signatures, and transaction metadata—on the Provenance Blockchain and verify the immutability of that data on their blockchain via digital certificates with audit trails.

This advanced integration has opened the door for any financial institution using Provenance Blockchain to add the digital signatures, document management, identity-as-a-service, patented fraud prevention, and other technical capabilities of ZorroSign’s platform with the same trust they have in Provenance Blockchain technology.

Further, government regulators of financial services also can make the leap to blockchain-based data management, enjoying the data compliance they gain from both Provenance and ZorroSign to support their organizations and public service processes.

In healthcare, the emergency of electronic health records (EHRs) is driving demand for digital record management solutions that extend outside the healthcare provider organization and across organizations such as clinical research, remote providers and telemedicine, insurance processing, and more. While financial services are more quickly adopting blockchain solutions, we anticipate healthcare to be the next big industry making the leap.

How does the integration with Provenance Blockchain affect ZorroSign’s existing platform’s features, such as digital signatures, automated compliance, and document storage, and what benefits does it offer to users?

We have huge plans for continuing to integrate Provenance Blockchain across our platform.

Without giving away too much, I am excited to share that the ZorroSign development team is assessing the replacement of the global B2B wallet used for Provenance Blockchain transactions with individual user’s specific wallets. This could be a revolutionary step as it will achieve true data democracy:

Making sure that each user who signs the document will have his/her ownership of the transaction, and therefore the ownership of the document. This level of integration will not be quick, as it must resolve many technical and business flow challenges as a significant split from the familiar Web2 model, but mapping a path to wallet individualization is already under way.

Our development team also aspires to run the entire document-signing flow based on data contracts in Provenance Blockchain—storing the documents themselves in blockchain nodes. Such storage would deliver the highest security, integrity, authenticity for documents and give the full ownership of the document to the signed wallet owner.

While these future advancements are actively being pursued, I’ll be able to share a more specific timeline for their launch by 2024.

Could you provide examples of real-world use cases where the ZorroSign and Provenance Blockchain integration has made a significant impact in terms of data security and privacy for businesses and individuals?

While our customer details are proprietary, I can say that since our announcement of advanced integration with Provenance Blockchain the number of customers asking for this specific integration has been exciting! We anticipate an entire new market of ZorroSign users in the years ahead, as providing a public blockchain option and cross-chain solutions with our private Hyperledger Fabric blockchain is blue ocean for ZorroSign and grants us a unique position in delivering blockchain-base data services for corporations, governments, and individuals around the world.

Could you elaborate on how the Provenance Blockchain Foundation and ZorroSign are strategically aligned in their mission to modernise financial services and enhance data security?

Since forming a strategic partnership with Provenance Blockchain in early 2022, ZorroSign has been tightly aligned with Provenance’s mission to modernize financial services and enhance data security.

ZorroSign’s data security platform uniquely integrates key technologies such as process and document workflow management, digital signatures, AI/ML form fill, patented fraud prevention, user authentication, and document verification to help financial service organizations speed transactions, secure their customer’s data, and maintain regulatory compliance. As Provenance Blockchain was purpose-built for the financial services and insurance industry, ZorroSign’s technology and strategic alignment to financial service requirements have been key to our successful partnership.

The press release mentions “patented fraud prevention.” Can you provide more details on how ZorroSign’s platform addresses fraud prevention using blockchain technology, and what role Provenance Blockchain plays in this context?

One of ZorroSign’s core technologies is our Z-Forensics® token. This technology is defined by two U.S. patents—one methodology patent on hashing data and storing on blockchain, and a second patent on using the forensics token as a digital seal to reference the original document via blockchain records.

ZorroSign’s Z-Forensics token is a tamper and fraud-detection seal for digital documents—creating an unprecedented, immutable audit trail and complete chain-of-custody validation that:

1 – Proves the individual who is performing the action to sign the document is who they claim to be (verification).

2 – Applies a digital equivalent of a wet-ink signature to the document (legal intent).

3 – Proves the authenticity of the printed copy or digital version of an electronically signed document, its content, attachments, and the signatures on it (authenticity).

This revolutionary security system allows a validated user to create an electronic document, then allows one or more other users to complete and sign that document in a particular sequence—”the workflow”—all the while capturing the chain of custody and an audit trail of the changes made to the document by the parties in the workflow, such as recording key authentication, security and validation information when an action took place.

Unlike any other digital signature solution, ZorroSign seals all documents with our Z-Forensics token—capturing the complete audit trail and accompanying attachments and signature workflow. The token is encrypted and contains all the details about the transaction: Time stamps, user authentication, documents, and attachments.

With the increased adoption of digital signatures and document management, what are some challenges that ZorroSign has encountered, and how does blockchain technology help overcome these challenges?

The market and need for digital signatures are growing aggressively, but where digital records and transactions are stymied by privacy, security, or legal enforceability issues, blockchain technologies can help. Specifically, by providing a zero-trust framework for user authentication and document verification, blockchains bring the decentralized consensus strengths of cryptocurrencies to other digital processes, ensuring immutable records distributed across peer nodes.

At ZorroSign, we have found that by starting with blockchain technology, you open the door to leveraging other advanced technologies like microservice architectures, AI/ML, and decentralized data storage and management. This allows our platform to scale more quickly, and our customers to enjoy the benefits of these advanced technologies without suffering the growing pains of testing and implementing them individually.

Could you explain the role of identity-as-a-service (IDaaS) in ZorroSign’s data security platform, and how does it contribute to the overall security and privacy of digital documents and transactions?

At a basic level, Identity-as-a-service (IDaaS) platforms enhance online user experiences, secure access to critical enterprise applications, and reduce IT resource-related expenses with efficient identity and access management (IAM) and privileged access management (PAM).

At ZorroSign, we recognize that blockchain has the power to improve IDaaS’s solution’s data security by bringing the decentralized, cryptographically secured blockchain data architecture to identity management. Blockchain technologies help IDaaS solutions to eliminate one of the most glaring gaps in cybersecurity, as distributed ledger technologies provide two means of preventing the threat of ransomware attacks: First, by decentralizing the data set itself; and second, by giving endpoints a quick path to recovery, even if they are themselves breached and access ransomed.

ZorroSign delivers IDaaS to verify users several ways:

1 – ZorroSign technology leverages the biometric capabilities of hardware endpoints to verify user identity

2 – ZorroSign has adopted password-less login capabilities

3 – ZorroSign multifactor authentication (MFA) provides stronger security, as before a user can sign a document, our platform can validate multiple dimensions of authentication based on the transaction security needs: What you know (i.e., your ZorroSign login password), what you have (e.g., your laptop or mobile device), who you are (e.g., biometrics such as fingerprints or eye iris on the device securing who can access it), etc.

Additionally, ZorroSign users can use our dynamic knowledge-based authentication (KBA) feature provided by LexisNexis. KBA requires the knowledge of private information of the individual to prove that the person providing identity information is the actual person.

Together, this integrated set of technologies allows ZorroSign to provide unmatched privacy and security for our users. Our IDaaS capabilities augment our blockchain architecture to ensure users/signers are who they say they are and deliver trusted connections in a zero-trust environment.

Looking to the future, what are the potential developments and innovations we can expect from ZorroSign and its integration with Provenance Blockchain in the field of data security and digital document management?

As I hinted earlier, we have big plans for Provenance Blockchain and are excited to continue expanding our integration to change how financial service organizations manage their data. Our teams’ shared goals of a more secure, more seamless, and more efficient financial services ecosystem readily map to government, healthcare, law, real estate, even retail markets. As such, we are enthusiastic to launch new solutions and innovative technologies!

At ZorroSign, we have started an entirely new R&D team, focused solely on future functionality and exploring moonshot technologies, and are pulling more and more university resources from the United States and Sri Lanka into our technical teams. We believe the combination of our blockchain, AI, and patented technologies can democratize data around the world, giving individuals greater control of their personal information, and allowing them to share it as they need with privacy and security. We cannot wait to show you what comes next!